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Short notice, big difference? The effect of temporary employment on firm competitiveness across sectors

par Giuliano, Romina;Kampelmann, Stephan ;Mahy, Benoit ;Rycx, François
Publication Publié, 2017-02-23

Travail de recherche/Working paper

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Résumé :

This paper is one of the first to examine how the use of fixed-term employment contracts (FTCs) affects firm competitiveness (i.e. productivity, wages and profits) while controlling for key econometric issues such as time-invariant unobserved workplace characteristics, endogeneity and state dependence. We apply dynamic panel data estimation techniques to detailed Belgian linked employer-employee data covering all years from 1999 to 2010. Results show that the effects of FTCs on firm competitiveness vary across sectors: while temporary employment is found to enhance productivity and profits in (labour-intensive) services, this is not the case in manufacturing and construction.